The Difference Between Assessed Value and Appraised Value
The assessed value and appraised value of a home are both important, but they serve different purposes and are determined in different ways.
Assessed Value
Assessed value is primarily used for property tax purposes. Local government officials (often a county assessor) will evaluate a home and property to determine its value. That assessed value is then used to calculate the amount of property tax the homeowner owes each year. The assessment typically takes into account the property itself, the value of any structures on the property, and the value of similar properties in the area. The frequency of assessments can vary depending on local laws and regulations.
Appraised Value
Appraised value is an estimate of a property’s market value at a specific point in time. An appraisal is typically ordered by a lender during the home buying process to ensure that the home is worth the price being paid. This value can influence the amount of money a bank is willing to lend a buyer. A professional appraiser will take into account factors like the home’s condition, size, location, and recent sale prices of comparable homes in the area.
While both assessed value and appraised value might be similar, they could also significantly differ. It’s possible for a home to have a high appraised value (indicating strong market demand) but a lower assessed value (which could mean lower property taxes). Conversely, a home might have a high assessed value but sell for less if the real estate market is weak.
As always, please feel free to contact me with any questions you may have about assessed value, appraised value, or anything inbetween.